On-chain data indicates that Bitcoin could face minimal resistance at $100,000 and beyond, particularly when considering the distribution of investor cost basis. A limited supply of Bitcoin has a cost basis positioned at levels above current valuations. In a recent post on X, institutional DeFi solutions provider Sentora (formerly IntoTheBlock) has examined how the different Bitcoin price ranges appear regarding investor cost basis as BTC nears $100,000. Presented here is a chart that illustrates the pertinent data concerning the price ranges in proximity to the most recent spot value:
The graph illustrates that the size of each dot reflects the quantity of Bitcoin supply acquired by investors within the specified price range. It seems that all the large dots are positioned below the spot price after the recent rally, indicating that the levels which experienced the highest demand are now in the green. It is evident that the ranges ahead, specifically those containing the cost basis of underwater holders, are marked by only small dots. In total, fewer than 3% of the cryptocurrency’s supply has its cost basis at these levels that exceed the spot price.
For any investor, the cost basis represents a critical threshold, thus they may exhibit a tendency to react in some manner when a retest occurs. Typically, holders who experienced losses before this retest may be inclined to respond by liquidating their coins. This is due to the possibility that these investors may fear experiencing losses once more. In a similar vein, investors may opt to increase their holdings during a retest of their purchase price, operating under the assumption that this level could prove to be lucrative once more in the future.
Such buying and selling behaviors are inherently inconsequential to Bitcoin when exhibited by only a limited number of investors. Tight price ranges, in which a significant number of investors converge on a common cost basis, can generate a reaction substantial enough to influence the asset. It is evident that Bitcoin possesses only limited ranges remaining on the profit side, suggesting the absence of significant resistance levels in relation to supply distribution. Consequently, a venture exceeding $100,000 is unlikely to be obstructed by break-even sellers.
While this may be true, the run could face another concern: profit-selling. Typically, an increase in the number of investors realizing gains correlates with a heightened probability of a mass selloff taking place. Given that the vast majority of the Bitcoin supply is now in the green, the potential for profit-taking could pose a risk to the ongoing rally. It remains to be determined whether sufficient incoming demand will be able to absorb the potential selling pressure.
As of this writing, Bitcoin is priced at approximately $99,400, reflecting an increase of over 3% in the past week.